Correlation Between Portland General and Union Electric
Can any of the company-specific risk be diversified away by investing in both Portland General and Union Electric at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Portland General and Union Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Portland General Electric and Union Electric, you can compare the effects of market volatilities on Portland General and Union Electric and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Portland General with a short position of Union Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Portland General and Union Electric.
Diversification Opportunities for Portland General and Union Electric
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Portland and Union is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Portland General Electric and Union Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Electric and Portland General is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Portland General Electric are associated (or correlated) with Union Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Electric has no effect on the direction of Portland General i.e., Portland General and Union Electric go up and down completely randomly.
Pair Corralation between Portland General and Union Electric
If you would invest 4,801 in Portland General Electric on September 3, 2024 and sell it today you would lose (9.00) from holding Portland General Electric or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
Portland General Electric vs. Union Electric
Performance |
| Timeline |
| Portland General Electric |
| Union Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Portland General and Union Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Portland General and Union Electric
The main advantage of trading using opposite Portland General and Union Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Portland General position performs unexpectedly, Union Electric can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Union Electric will offset losses from the drop in Union Electric's long position.| Portland General vs. MGE Energy | Portland General vs. CMS Energy | Portland General vs. OGE Energy | Portland General vs. DTE Energy |
| Union Electric vs. IDACORP | Union Electric vs. Pinnacle West Capital | Union Electric vs. Portland General Electric | Union Electric vs. CMS Energy |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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